Nationally, the average cost to install a geothermal heating or cooling system is $7,126, with most homeowners spending between $3,482 and $12,117. With equipment and variable excavation costs, total prices can reach above $20,000 for residential types. Geothermal HVAC systems (heating, ventilation, and air conditioning) are growing in popularity as homeowners seek ways to reduce their carbon footprints and lower monthly bills. These units are slowly becoming a popular choice as both improvements in technology and tax incentives drive lower prices for both purchase and installation.

However, installation costs are still higher than air exchange, gas, or electric setups  expect to spend about twice as much. Geothermal HVAC are the most energy efficient and cost-effective form of heating or cooling.

Ground Source Heat Pump Prices

A typical arrangement has two main components, the ground loop and the heat pump. According to the United States Department of Energy, a heat pump costs an average of $2,500 per ton with the average home requiring 3 tons or about $7,500 to install. A ton is simply a measure of how much heat can be moved in one hour  one ton is about 12,000 BTUs (British Thermal Units).

The central heat pump unit will account for the majority of repair and maintenance costs, averaging about $350, but can range anywhere from $50 for simple maintenance issues up to $1,700 for a new compressor.

Geothermal System Configuration Costs

Horizontal, Vertical, and Pond Ground Looping

Youll typically need about 400-600 feet of looping per ton, or about 3 tons or 1500 feet for an average home.

Horizontal  $800 per ton  This type can be either slinky  with overlapping coils  or straight pipes. Slinky utilizes less land area but usually needs highly conductive soil.

Vertical  $1,500 per ton  Used when land area is insufficient. Instead of digging horizontal trenches, vertical types run a few hundred feet straight down into the earth.

Pond  varies (about $800 per ton)  it depends on the location of the pond. A trench alone will cost about $10-$20 per linear foot. The closer the pond is to your home, the less excavation needed. They are usually more efficient with thermal transfer but require a body of water at least 8 feet deep.

Closed vs. Open Loop

Specific costs will vary greatly between these two types depending on your situation. The type best suited to your needs will depend heavily on available water sources, soil types, and land area.

Closed loop systems run water through a circular loop of piping, typically using an antifreeze liquid solution. This type is used when there are limited water sources, prohibitive environmental regulations, or with pond configurations.

Open loop systems use ground or well water, drawing clean water in from one intake well and discharging to a different well or sewage system. Open loops are typically less expensive to install, saving as much as 60% or more, but require regular maintenance  changing filters, softening water, and well testing.

Youll also need to consider local laws governing open loop systems, which have the potential to damage natural water supplies. Consult a professional to determine the type that best fits your situation and needs.

Soil Composition  Professional soil testing costs run an average of $1,300. Soil composition determines the types of materials that can be used. Extremely dry soil may need additional irrigation to moisten the soil for better heat transfer. Soils, like those rich in saline, can be corrosive to metals and other materials.

Local Regulations  Local and state regulations can limit the types of materials used or the type of system installed. Groundwater protection regulations may prohibit open loops. Check with your local regulatory agency  usually the metro area building department  and state environmental and building regulatory agencies  though these tend to vary greatly from state to state.

Open Loop Regulations  For this system, you may need to gain state water rights and discharge permits which add to the cost. A National Pollutant Discharge Elimination System Permit may also be required through the Environmental Protection Agency  free from the EPA, but states may charge a fee. For example, in Washington State, youll spend about $2,500 per year on permits alone. A licensed HVAC contractor will take care of all local and state permits.

Your Homes Square Footage  A moderately sized home  about 2,000 sq. ft.  will need about a 3-ton system. Varying sizes of heat exchangers and lengths of looping are needed.

Heat pump maintenance  Heat pump repairs average about $350. It requires biannual inspections by a licensed and experienced HVAC contractor. Follow these tips to keep it clean and avoid breakdowns.

What Are the Benefits of Geothermal Heating and Cooling Systems?

Pays for Itself  It will shave an average of 40 to 60 percent off your utility costs. Depending on your location, youll see the extra installation costs pay for themselves in about three years.

Low Maintenance Costs  Youll save an estimated $500 per year in maintenance costs. Geothermal heating and cooling is an old and relatively simple technology, meaning less maintenance and repair costs.

Environmentally Responsible  Besides being cheap, its the most environmentally responsible HVAC system with 55 to 60 percent lower greenhouse gas emissions than air exchange types.

The Payback and Lifetime of Using Geothermal Energy Systems

Homeowners choosing to invest in geothermal will enjoy about two decades of energy bill reductions of 40 to 60 percent. If you include a 4 percent annual increase in utility costs and include maintenance savings, that comes out to an estimated $30,000 to $70,000 in savings over its 18 to 23-year life. A geothermal HVAC setup typically pays for itself in 2 to 10 years. The exact payback time depends on several factors including current utility rates and how energy efficient your home is.

Financing the Installation of a Geothermal System

While it is easy to see the benefits of installing geothermal heating and cooling, finding the cash to cover it can be a challenge. Geothermal will run about twice the cost of a conventional air exchange types. Most installers and retailers have financing available, some with little or no interest. Local, State, and Federal assistance and rebate programs are often available. Your installation professional can usually direct you to any tax or rebate programs available in your area.

Hire The Right Geothermal Pro For Your Job.

Other Energy Efficiency Improvements

These are both budget and environmentally-friendly HVAC solutions. However, theyre only as efficient as the rest of your house. Improve these areas of your home to maximize your HVACs capabilities.

Home Insulation: $900 to $2,000  the better your homes insulation, the less your HVAC system needs to function, reducing costs and environmental impacts further.

Energy Efficient Windows: $2,500 to $7,500  The cost of replacing windows should be a part of your overall home insulation budget. Up to 30% of heat is lost through old windows. Replacing them with low-E coated windows can save up to 15% on your energy bills annually.

Home Energy Audit: $200 to $600  Hiring a professional home energy auditor costs about $400. They will check for leaks and identify opportunities for energy savings which can easily pay for itself in the first year.

Air Handler & Duct Work: $300 to $500  The most important action that homeowners can take to improve air handler efficiency is to change the air filter based on the manufacturer's recommendations. Clogged air filters block air circulation, reducing heating or cooling ability and increasing the workload. You should invest in having your duct work cleaned and inspected at least once a year by a licensed specialist. Inspections are best done in spring, after winter heating is complete but before summer cooling begins.

What Is Geothermal Heating and Cooling?

Geothermal heating uses the relatively constant temperatures found a few feet under the ground to regulate the temperatures in your home. This system pulls heat into your home from the Earth in the winter and moves heat away from your home in the summer.

It uses two components, a heat exchanger and several hundred feet of piping, often called a "loop". During the summer, the liquid in the loop draws heat from the earth as it circulates. In the summer, the heat is carried away from the home in the liquid and is absorbed by the ground.

DIY or Hire a Pro

This is not a DIY project. There is a high level of expertise involved in designing and installing a geothermal system. Professionals will be able to calculate the thermodynamic needs of your home in relation to the ground, water source, and climate to create a design that will meet your needs.

Correctly installed, permanent loops require almost no maintenance or replacement for 50+ years. Understanding what type you need for your homes size, land availability, soil types, and local regulations is best left to a licensed professional.

Share your cost experience

Help others plan and budget for their projects

Vaughn Murphie

More than 1 year ago

My experience with geothermal pricing would show prices for an installation running at the bare minumum system of $20k to an average of $35k and a high of $45k for an elaborate high end system based upon multiple home show salesmens pricing of a 2000 sq' 3 ton heat pump project

Roger Shaw

More than 1 year ago

I agree with the other comment that the cost data presented is not at all realistic. $20K and above is really the low end for a closed loop system including vertical well drilling and the rest of the work. We'll see what the contractors have to say.

Anne Fritts

More than 1 year ago

Very helpful for someone just beginning to do research on a geo thermal system.

Carey Campbell

More than 1 year ago

I installed geothermal heating and cooling in my house and it is terrific.
Geothermal heating and cooling cut my monthly energy costs dramatically, by two-thirds.
Once I installed solar panels, also, the house became a profit maker, a Green energy money maker.

Mike Csolak

More than 1 year ago

One must look at the payback with these systems before they make a decision. Geothermal is not rocket science, just expensive. Its just another way of transferring heat. I could throw a couple of hoses in a pond and use the pond as your condenser and that is geothermal. Your just taking the fan away outside and using water to do your condensing. Yes that's efficient but commercial HVAC has been doing water cooled for eons. They just use cooling towers. So my advise would be to weigh your options. there are many fast talking sales people out there. Earths crust? lol whats that all about? There are also many 20 + seer units now to look at